2016 budget assumes oil output of 2.2m bpd at $38 a barrel

Nigeria’s 2016 budget assumes oil production of 2.2 million barrels per day at $38 a barrel, confirmed by the budget minister, Udoma Udo Udoma said on Friday, shortly after President Muhammadu Buhari signed the delayed bill into law. Senator Udoma made the comments while briefing State House correspondents.

 

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Buhari signs delayed 2016 budget into law – Reuters

By Felix Onuah

Nigeria’s President Muhammadu Buhari signed the delayed 2016 budget into law on Friday, a Reuters witness said, ending wrangling with lawmakers that had lasted for weeks.

The record 6.06 trillion naira ($30.6 billion) budget triples capital expenditure in Africa’s top oil exporter from 2015 and aims to stimulate an economy hit hard by the fall in global crude prices.

Nigeria is facing its biggest economic crisis for years after oil revenues, which make up about 70 percent of national income, slumped along with global crude prices.

Senior politicians including Senate President Bukola Saraki and Finance Minister Kemi Adeosun were present when the president signed the bill.

“This budget is a budget of faith for the Nigerian people,” said Buhari.

Adeosun has said Nigeria is expected to post budget deficits for the next two to three years. In 2016, the deficit is seen at 2.2 trillion naira ($11.6 billion), slightly less than a previously estimated 3 trillion naira.

Buhari withdrew his original budget bill in January because of an unrealistic oil price assumption. Parliament approved an amended proposal in March but only submitted highlights, prompting Buhari to say he would only sign the bill after it was resubmitted.

Nigeria: National Assembly Returns Corrected Budget to Presidency – Guardian

By Adamu Abuh

Indications emerged yesterday that the National Assembly has re-presented a newly repackaged 2016 Appropriation Bill to President Muhammadu Buhari.

It was gathered that the Deputy Speaker of the House of Representatives, Mr. Sulaimon Yusuf Lasun submitted the repackaged budget to the two Presidential liaison officers to the president: Suleiman Kawu Sumaila of the House of Reps and Senator Ita Enang of the Senate.

Lasun, who headed the conciliatory committee on the budget was billed to address reporters on the development in Hearing Room One of the House of Representatives wing but had to call it off for inexplicable reasons at about 1.30 pm yesterday.

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2016 Budget: NASS has resolved differences with Presidency – Saraki

President of the Senate, Dr Bukola Saraki, says all the grey areas in the 2016 Budget have been resolved.

Saraki said this on Tuesday night while speaking with State House correspondents after a closed-door meeting with President Muhammadu Buhari in Abuja.

Buhari met with the leadership and principal officers of the National Assembly, as part of efforts to resolve the 2016 budget impasse.

Saraki said that the lawmakers came to inform the President and his team of the solutions they had found to the budget impasse.

He said that both sides agreed on the way forward and assured Nigerians that the process would be completed in a matter of days.

“We just finished a meeting with the President and the Vice-President.

“We came to let them know some of the solutions that we found in moving the budget process forward and we are happy to say that we have agreed on the way forward.

“We believe that this process will be completed in matter of days rather than weeks.

“So, it is good to Nigerians and all of us, we have found a way forward and in a matter of days, the budget will be ready for the President’s assent,” he said.

Saraki also said that committees had been set up on both sides to hasten actions on the process.

He said that the committees would meet over the next few days to “tidy up a few loose ends and here and there and the outcome will be satisfactory to everybody.”

Also commenting on the outcome of the meeting, the Minister of Budget and National Planning, Mr Udoma Udo Udoma, confirmed that the Executive had agreed with the Legislature to resolve all grey areas in the budget and the modalities of doing so in the next few days.

“We have agreed to work together to resolve all issues in the next few days and we have also agreed on the modalities of or doing so.

 “It was a very good meeting and it was very positive; within the next few days, all issues will be resolved.

 “We are working together, both the Executive and the Legislature, to sort those things out. Within the next days, all matters will be resolved,” he added

Those who attended the meeting included Vice-President Yemi Osinbajo; President of the Senate Bukola Saraki; Speaker of the House of Representatives Yakubu Dogara; Deputy President of the Senate Ike Ekweremadu and Deputy Speaker of the House of Representatives Yusuf Lasun.

Others were Senate Minority Leader Godswill Akpabio; House Leader Femi Gbajabiamila, among other leaders of the National Assembly; Chief of Staff to the President Abba Kyari and Minister of Budget and National Planning Udoma Udo Udoma.

The Senior Special Assistant on National Assembly Matters (Senate), Ita Enang; and the Senior Special Assistant on National Assembly Matters (House of Representatives), Samaila Kawu, also attended the meeting.

Source: PM News

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Nigerian President to Meet Lawmakers to Negotiate Delayed Budget – Bloomberg

By Emele Onu

Muhammadu Buhari has yet to sign 2016 budget into law. Lawmakers passed a version of the spending plan last month.

Nigerian President Muhammadu Buhari will meet leaders of Parliament on Friday to negotiate a delayed 2016 budget after he said lawmakers had made changes to the original spending plan he presented in December.

The president will meet to resolve “areas where he wanted adjustments in the 2016 budget,” Abdulrazak Namdas, spokesman for the House of Representatives, said by phone from the capital, Abuja. “It is going to be a negotiation.”

Buhari has yet to pass the budget after it was stalled by politicians alleging in January that the document contained mistakes and discrepancies, before Parliament passed a version last month. Buhari said lawmakers removed and replaced what he put in the original spending plan and that he would review the budget before signing it into law, delaying disbursements to ministries and government agencies.

Buhari presented a record 6.1 trillion naira ($30.6 billion) spending plan on Dec. 22, saying expenditure needed to increase about 20 percent from 2015 to stimulate the economy of Africa’s biggest oil producer, which has been hammered by the slump in crude prices. Growth fell to 2.8 percent last year, the slowest pace since 1999.

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Buhari needs more time to sign 2016 budget – Minister

Nigeria’s President Muhammadu Buhari needs more time to check the 2016 budget bill before signing it, a government minister said on Wednesday, signaling further delays before the legislation takes effect.

The budget for Africa’s top oil producer has been held up for months as Buhari had to withdraw his original bill, which set spending at a record $30 billion, in January, due to an unrealistic oil price assumption and flaws in the draft.

Lawmakers approved an amended bill last month but said last week they would hold new talks with the government to discuss “areas of concern” after local media reported disputes over details.

“On the 2016 budget we are still talking,” Udoma Udo Udoma, minister for budget and national planning told reporters. He declined further comment.

Buhari hopes the bill will revive the economy hit by a slump in oil prices but officials have left open how it would be funded. The government has said it might sell Chinese Panda bonds or get a loan deal from China and the World Bank.

Source: Reuters

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President Buhari’s China Visit: What we know so far

A lot have been made of President Buhari’s trip to China. Politicians from both major parties have either praised the achievements of the president while his opponents are focusing their criticisms on the weakness of the deal. We will dissect both of those at a later date but let’s separate fact from fiction and highlight what we know so far.

  1. $2 billion from China to finance the deficit in the 2016 budget – This is one of the more controversial deal alleged agreed too although lots of debate whether it’s been signed or merely just verbally agreed to. It’s no secret that the yet to be signed 2016 Budget includes a deficit given the lower price of oil. This is one option to help plug the gap. Another option being discussed by the Federal Government is an increase nationwide to Value Added Tax (VAT) as well as increased enforcement to revenue collection but I digressed
  1. Naira – Yuan Currency swap agreement – We’ve discussed this in an earlier post. But basically, according to several news sources including THISDAY, “The new agreement would see Nigeria-China trade, which account for over 70 percent of imports into Nigeria, concluded in Yuan. Until now, over 90 percent of international trade between Nigeria and the world is done in dollars, and in the process putting so much pressure on the naira.”
  1. Agricultural Demonstration Farms across the country – One of the Nigerian President’s goal is to make Nigeria self-sufficient in food production. The Chinese President has offered $15m in agricultural assistance to Nigeria for the establishment of 50 Agricultural Demonstration Farms across the country. All necessary details are yet to be revealed
  1. Vocational/Technical Training & Scholarships – China and Nigeria agreed to increase military and civil service exchanges as part of a greater capacity-building commitment. China has offered to raise its scholarship awards to Nigerian students from about 100 to 700 yearly. 1,000 other Nigerians are to be given vocational and technical training by China yearly
  1. Other Agreements (Without a lot of detail)
  • Framework Agreement Between the Federal Ministry of Trade and Investment of the Federal Republic of Nigeria and the National Development and Reform Commission of the Peoples Republic of China
  • Memorandum of Understanding on Aviation Cooperation between the Ministry of Transportation (Aviation) of the Federal Republic of Nigeria and the Ministry of Commerce of the Peoples Republic of China
  • Memorandum of Understanding between the Federal Republic of Nigeria and the Government of the Peoples Republic of China on Scientific and Technological Cooperation
  1. $6.0bn infrastructure Loan Agreement – The Breakdown
  • North South Power Company Limited and Sinohydro Corporation Limited signed an agreement valued at $478,657,941.28 for the construction of 300 Mega Watts solar power in Shiriro, Niger State
  • Granite and Marble Nigeria Limited and Shanghai Shibang signed an agreement valued at $55 million for the construction and equipping of granite mining plant in Nigeria
  • $1 billion is to be invested in the development of a greenfield expressway for Abuja-Ibadan-Lagos under an agreement reached by the Infrastructure Bank and Sinohydro Corporation Limited
  • $250 million deal to develop an ultra-modern 27-storey high rise complex and a $2.5 billion agreement for the development of the Lagos Metro Rail Transit Red Line project.
  • $1 billion for the establishment of a Hi-tech industrial park in Ogun-Guangdong Free Trade Zone in Igbesa, Ogun State
  • Ogun-Guangdong Free Trade Zone and CNG (Nigeria) Investment Limited also signed an agreement valued at $200 million for the construction of two 500MT/day float gas facilities.
  • An agreement valued at $363 million for the establishment of a comprehensive farm and downstream industrial park in Kogi state was also announced at the Nigeria-China business forum.
  • $500 million project for the provision of television broadcast equipment and a $25 million facility for production of pre-paid smart meters between Mojec International Limited and Microstar Company Limited – Currently Under Negotiations

As more details come out, they will be shared on here. Also we will continue with the post mortem of the part of the deal of most interest to Nigerians, the currency swap agreement with the pros and cons.